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Bergelt takes on new role at OIN but Paradox Capital keeps on trucking

Keith Bergelt, who made his name first with Motorola and subsequently as a pioneer in the world of IP finance at IP Innovations and then at Paradox Capital, has become the CEO of the Open Innovation Network (OIN). This is the company founded by IBM, Novell, Red Hat, Philips and Sony, that acquires intellectual property rights and then licenses them out royalty free to organisations that agree not to assert their own patents against either Linux or Linux-based applications. While at Paradox, Bergelt helped arrange several significant transactions, including deals around the purchase of Betsey Johnson by Castanea Partners. 

The last I heard was that Jerry Rosenthal,the former VP of IP and licensing at IBM, was CEO of OIN, so presumably he has either left the organisation or moved to another post. As yet there is no official announcement from the organisation on its website announcing Bergelt’s arrival or what Rosenthal will now be doing.

As for Paradox, yesterday evening I got an email from Ed Meintzer, the firm’s executive managing director. He tells me that it is going from strength to strength: “Paradox continues to trade in IP-based loan transactions; in fact, our pipeline is stronger than it has been in recent memory because many capital providers have become more conservative in their approach to investing capital. Earlier this year, we closed an IP-based loan with an apparel company, and I expect that we’ll have more news to share with you in coming weeks and months on the deal front.”

It seems, therefore, that for at least one IP finance firm, the times are looking good, despite what may be happening generally in the financial markets. It could well be, I suppose, that as lines of credit tighten in other areas, IP becomes an increasingly attractive means of raising cash. This makes even more sense when you consider that IP rights themselves are becoming very attractive for acquirers, if they are seen to have real value; something which, of course, makes good IP less of a risky security. The trick, of course is to have the skill to decide what is or is not good (and valuable) IP. This is where a specialist financier such as Paradox, which managed a fund of around $250 million last time I heard, comes into its own.

UPDATE (26-4-2008): I got an email from Keith Bergelt giving a few more details about the job he will be doing at OIN:

I have a diverse background that spans the gamut from diplomacy and policy to c-level strategy consulting to general management and technology strategy to finance and private equity. I have been involved for the past 18 years in activities directly related to IP while innovating to set up the first strategy consulting practices focused on IP and intellectual asset management at a major consulting firm. I also set up the first standalone IP business inside Motorola while running technology strategy across Motorola's businesses, then ran all aspects of strategy, licensing and IP for an IP-intensive company in Cambridge, UK, for Kelso & Co. I then worked at TPG advising full time on technology and IP-intensive business acquisitions, then started and raised the first dedicated IP-based lending fund in the market for Principal Financial Group (2003) and later Babcock & Brown - $300MM in raised dedicated and not merely pledged capital. I did this after being involved in IP policy and the negotiation of multilateral IP rights agreements as a member of the US Dept of State as a capstone to my 12 year diplomatic career.

So, my assuming the role of CEO of OIN (as I have recast it - the guardian of Linux responsible for enabling, influencing and defending the integrity of the Linux ecosystem) ties in all of my past experience and gives me a platform to continue to be an innovator but have a far more profound positive impact on the IP world and, more importantly, on the global macro-economy. I essentially manage a fund for some of the largest and most influential players in global technology - IBM, NEC, Sony, RedHat, Novell, & Philips - whose purpose is to enable the Linux ecosystem and shield it from patent attacks by patent trolls and others whose business models might be antithetical to true innovation and, by their nature, are opposed to truly facilitating work through rapid advancements in IT and communications technologies and applications.


Joff Wild
IAM Magazine
25 April 2008

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